The latest FNB Residential Property Barometer on Monday revealed that while some positive signs are starting to emerge in the South African housing market, the global economic crisis keeps the 2009 outlook uncertain.

The overall indicator of the FNB Residential Property Barometer has shown a positive shift, rising from 4.1 in the third quarter of 2008 to 4.6 in the fourth quarter.

"Seasonality may have played a role in the slight increase in Q4 2008 activity level. However, some of the headline trends where seasonality doesn't play as much of a role also showed a quarterly improvement," said John Loos, property strategist at FNB Home Loans.

Three such headline trends showing improvements are the time property remained on the market, the selling price of property, and first-time entrants into the market.

The length of time property remains on the market has shifted. From a peak of 20 weeks and 1 day, Q4 2008 saw the average time on the market fall significantly to 15 weeks and 3 days, by far the most significant drop since the Barometer's inception back in 2004.

In addition, a slightly smaller percentage of sellers had to drop their selling price.

From 88 percent in Q3, the percentage of sellers selling at less than asking price declined to 81 percent, the barometer revealed.

First-time buyers were reported to have become a more significant part of the market in the fourth quarter.

As a percentage of total house purchases, first-time buyers made up an estimated 17 percent in Q4 2008, compared with 12 percent in the previous quarter.

However, the buy-to-let market showed no sign of turning for the better. As a percentage of total buyers, buy-to-let buyers made up a smaller estimated 12 percent in Q4 2008, compared with 14 percent in the previous quarter.

But arguably the most exciting news emanating from the Barometer was the estate agents' view that the percentage of sellers selling in order to emigrate had declined significantly from 20 percent in the previous quarter to 14 percent in the final quarter of 2008, this following a steady rise since late 2007.

Should this be the start of a downward trend in emigration selling, it would not only provide support for the property market but for the economy as a whole.

Loos said that he believed that over time minority groups should come to terms with the leadership change, something which is a normal part of democratic societies, and he believed that this year may even see a surge in expats returning to South Africa, accompanying a drop in emigration, driven by a very weak job situation in many developed country as the economic crisis deepens.

"Therefore, the overall picture of the FNB Residential Property Barometer shows early signs of property demand strengthening. The household sector's debt situation has begun to improve as interest rates start to decline and the debt-to-disposable income ratio follows a downward path," said Loos.

"However, we don't expect any fireworks, as the big negative factor, that will work against the positive impact of lower interest rates, for residential property in 2009 will be the weak global economy and its negative impact on economic growth via SA's export-driven sectors."

While the residential and new mortgage loan demands are expected to recover gradually as 2009 progresses, national house price inflation is only expected to resume in 2010, concluded Loos.

I-Net Bridge